Understanding Demand Billing
Energy Demand FAQs
What is Demand?
Demand is the amount of power needed to supply every electrical device running in your home or business at a specific point in time. It is the maximum rate at which your household has consumed electricity.
Residential Demand Comparison Examples
Members with the same demand, 8kW, the Platte-Clay average, but different energy consumption.
For most members, pulling out the cost of demand, shown on the right will have little overall effect on the amount due.
Members can find their estimated demand by using the energy demand calculator.
Why Bill on Demand?
Why are you changing your bills to show demand? No other utilities are doing that.
Platte-Clay is breaking out demand from the Energy Usage to be fairer to all Platte-Clay members.
Platte-Clay’s wholesale rates are based on total co-op demand, demand (rate at which electricity is used) and the total energy consumed. Some members create more demand by using more appliances at the same time and as a result, a higher demand for electricity.
And the second point, the industry and many utilities are beginning to see a need to move to a three-part bill, with a demand charge, energy usage charge and a customer charge, which some utilities call a facilities charge, access charge or other term to clearly identify the cost components.
In the past, it was easier and cheaper to simply bill metered kWh usage. With affordable technology available today to capture demand, it makes sense to unbundle demand and make sure everyone pays their fair share, removing past subsidies among rate payers.
I can’t help what my demand is. Why am I being penalized?
There is no penalty for the electrical demand that a member sets: every household using electric service has “demand” and we’ve always been paying for it, as it is the way the industry always, in the past, billed members – customers.
The member demand has always been bundled with the energy usage charge, but now with affordable technology we are able to measure demand and bill separately, giving members the opportunity to control it. Unbundled charges for demand more fairly distributes the costs of providing service to those members who use large amounts of electricity at one time.
Beginning in November, 2016, members began paying for their individual portion of the demand created, which ultimately affects the wholesale cost of electricity. Platte-Clay pays for electricity based on the co-op’s collective peak demand.
Platte-Clay must plan and be prepared to meet each member’s demand needs even when it is not a daily occurrence.
Equipment to meet members’ electrical demand must be on standby and ready to meet any increased need for electricity immediately. This may ultimately include installing additional transformers, wires, substations and even additional power plants.
Why not bill us on time of use?
Time of use pricing is a variable rate structure that charges for energy depending on the time of day and the season the energy is used. Time of use is not available at this time.
The demand rate structure your co-op is moved to does not affect when you use electricity.
Members can still use electricity any time without paying more; we just need to be aware of not running many or all appliances simultaneously.
Further, time of use rates still have the demand buried in the energy usage charge.
How Demand is Determined?
How will the peak demand charge be shown and when do you reset it?
Members’ billing demand shall be the greater of the current month actual demand or 50 percent of peak actual demand established in the preceding 11 months. Platte-Clay will set member demand on a rolling basis with a new 12-month period beginning on the first day of each calendar month. Members will be billed at $2.50 per kW on 50 percent of peak demand. For example, the average monthly demand for Platte-Clay members is 8 kW although individual household peak demand can be much higher.
Demand will show as a line of comment on the bill as the demand charge.
How will Platte-Clay determine peak demand?
The co-op has billing software interconnected with members’ meters that can determine the highest demand within the current month and the preceding 11 months.
Going forward, the co-op will review demand every month and re-set member demand if it has increased from the previous peak demand established in the prior 11 months. Members will be billed at $2.50 per kW based on 50 percent of peak demand or the actual monthly demand, whichever is more.
How will I know how much my demand is?
Platte-Clay will base member demand charge on 50 percent of the highest demand set by each member during the past 11 months. Member demand is in the billing detail of the monthly invoice on page 2. The first bills showing demand were November, 2016. Members are billed at the greater of the current month actual demand or half of their peak demand set over the past 11 months.
How can I find out what my demand is?
Members can see their peak demand both on their bill and through the online account portal. The portal features detailed information about demand set for each meter and can be useful in identifying ways to reduce overall demand.
How can I reduce demand?
All households that use electricity create a certain level of demand. For some families, it will be a matter of deciding when to use appliances to help manage and reduce demand. For some busy families, saving time will be more important than reducing demand.
The easiest way to reduce demand while meeting household energy consumption requirements is to spread usage throughout the day and night, perhaps using appliance timers.
Now is a good time to review household or business processes and determine if it’s possible to perform high energy consuming tasks at different times of the day. Perhaps some appliances or equipment can be used in the morning and other appliances or equipment in the afternoon or evening to balance and reduce demand, with the goal of ultimately reducing peak demand.
Many newer appliances have timers, making it easy to get it ready to go and simply delay the start time. With a little planning, we now have more control over our electric bill with the ability to manage when we use power, not just how much we use.
For comprehensive information on how to save energy and to reduce demand, we recommend www.energystar.gov
In addition, look for suggestions on the Platte-Clay web site (pcec.coop) and handouts in the office.
How will showing demand affect budget accounts?
Budget accounts are recalculated and trued up each year the month that a member signed up for budget billing.
How will net metering accounts show demand?
Net metering accounts bill normally, showing the demand charge as a separate line item, as with as all other co-op members. Demand will be reset every year.
How will this effect annual accounts?
Annual accounts will bill normally and demand will be billed along with the kWh usage.
How will this affect my billing date?
Your billing cycle will remain the same. If you would like to change billing cycles, please let us know. Call the office, 628-3121 or e-mail firstname.lastname@example.org with your preferred billing date.
How much will this change cost me?
How do I know my meter is accurate?
The Platte-Clay meters are periodically tested and are on a methodical replacement plan that maximizes accuracy and manages the co-op capital costs. Tolerance for the co-op’s meter variances is tighter than industry standards.
How much will my bill change?
The majority of the members will see little change in the amount of their bill because currently members’ demand is included in the energy usage charge. In fact, breaking out demand will be revenue neutral for the co-op.
Platte-Clay conducted an comprehensive cost-of-service (COSS) study to determine the co-op’s new rate structure and rates which resulted in an overall, co-op-wide rate increase of 4 percent.
As a result of the COSS, the co-op no longer will have the two block rate structure, eliminating the first 200 kWh block of $0.11165 and reducing member costs by approximately $6.00 a month. The new rate will be $.079 for all kWh, all energy used plus the demand charge of $2.50 per kW.
However, for some, with the new rate structure that separates out demand, the overall amount may go up or down based on the member’s individual demand.
How much will the customer charge be, will it be the same?
The customer charge will remain the same, $25.38 a month.
How much will the 200 kWh block rate at .11165 change?
There no longer will be a separate rate for the first 200 kWh at $.11165, was set at that amount to help offset demand costs; there will be only one energy block billed at $.079 per kWh. Demand will be billed at $2.50 per kW.
As of November, 2016, there are three charges: 1) Customer Charge 2) Energy Usage and 3) Demand Charge.
By pulling out demand and billing for it separately, the kilowatt rate dropped to $.079.
How much will this affect my bill?
It depends, and each household is different.
Members who manage the number of items used at one time may see their bill decrease; other members who use or tend to use or need to use everything at one time may see a slight increase.
There’s no good way to project the effect at this time because each member’s household is different.
Our best recommendation is to ask family members to avoid turning on all appliances at one time, if that’s possible. We understand that for some busy families that simply won’t be possible.
What appliances affect my demand?
Everything with a plug, from a hair dryer to a freezer, affects demand. For general information on appliances, we suggest visiting www.energystar.gov/products/appliances
There’s a comprehensive list of appliances and information about their efficiency. If you’re shopping for appliances, we recommend looking for the Energy Star label, as it will be among the most efficient.
In addition, Platte-Clay has an energy demand calculator, which at present shows the kw required to power a number of appliances and will be providing information over the coming months to help members understand how appliances affect demand.
That will be a start on determining the effect of appliances on demand.
How much do lights affect my demand?
Very little, because lighting represents less than 15 percent of the average household electric bill, and it’s possible to lower that by using compact fluorescent lights or LEDs, and of course, turning off lights when not needed.
To illustrate demand, one 100 watt light bulb burning for 10 hours uses 1 kilowatt hour of electricity. Ten 100 watt light bulbs burning for one hour use the same 1 kilowatt hour of electricity, but require 10 times the generating resources (demand) to produce the same amount of electricity. Light bulbs are a simplified example, but when talking about large appliances in a home such as heating and cooling systems, electric ovens and clothes dryers, we can see how running all of these appliances at once requires significantly more resources than staggering their usage over various times.
How much would I save if I just change to natural gas or propane?
We suggest you wait a couple months to see the actual impact of breaking out demand for each member.
While this is a change, you already have been paying for demand. We just want to ensure that each member is only paying for their individual demand, and not subsidizing other members’ demand.
This is simply a fairer way of billing and showing the actual demand amount.
We feel we should let you know that there is a possible monthly service charge for gas in addition to the amount of energy you use, plus the cost of new appliances and installation of gas lines to and in your home.
Historically, electric rates have been relatively stable compared to the volatility of gas prices, so we’re not sure that will actually save you money.
While showing demand is a change, all members have already been paying for demand within the current rates.
The new system will ensure members are only paying for their household’s demand, and not subsidizing other members’ demand. This is simply a fairer way of billing and showing everyone’s actual amount.